Bank of Thailand likely to hold policy rate at 1.5%
New leadership and members to oversee initial policy rate decision
The Bank of Thailand is anticipated to maintain its policy rate at the upcoming meeting tomorrow, October 8, as it evaluates economic data and allows time for the new governor to adjust to the role.
Pipat Luangnaruemitchai, chief economist at Kiatnakin Phatra Financial Group, stated that the Monetary Policy Committee (MPC) will likely decide tomorrow to keep the policy rate unchanged, although the decision might not be unanimous.
The meeting will mark the first presided over by new governor Vitai Ratanakorn, who began his tenure on October 1. Ratanakorn has reinforced the bank’s commitment to maintaining macroeconomic stability amid domestic and international challenges.
Two new MPC members, Charl Kenchon, formerly of K-Research, and Suwannee Jatsadasak, the Bank of Thailand‘s assistant governor for corporate development, will attend their inaugural meeting.
Pipat suggested that the MPC would likely maintain policy flexibility due to weaker economic signals. He also mentioned that the regulator will keep an eye on supply-side challenges, especially in the manufacturing and export sectors.
Despite these challenges, Bangkok Post reported that the central bank is expected to continue its accommodative monetary policy stance. Pipat indicated that the MPC is unlikely to reduce rates at this meeting, choosing instead to evaluate the effects of previous rate cuts.
Kasikorn Research Centre forecasts a split vote to maintain the policy rate at 1.5%, following a 0.25 percentage point cut in August. The centre expects that most MPC members will favour holding the rate to assess the impact of the earlier reduction and retain policy flexibility for future adjustments.
The MPC is likely to sustain its accommodative stance, with an emphasis on managing economic risks and ensuring financial stability.
The SCB Economic Intelligence Centre, part of Siam Commercial Bank, also anticipates that the MPC will keep rates steady this week. However, they predict a 0.25 percentage point reduction in December, lowering the rate from 1.5% to 1.25%.
The SCB Economic Intelligence Centre expects further rate cuts of 0.25 percentage points in early 2026, bringing the policy rate down to 1% in the first half of next year. They noted that the accommodative policy will help ease financial conditions amid slowing growth, low inflation, and declining credit quality.
Additional rate cuts could support the economy, reduce debt burdens, and aid in the deleveraging process for businesses and households. However, these may not significantly increase new lending, as both financial institutions and borrowers remain cautious.
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